Malaysia Going Digital Post-pandemic

Setting out an economic recovery plan . . . 

On June 5, 2020, Malaysian Prime Minister Tan Sri Muhyiddin Yassin introduced ‘PENJANA,’ a C$11.4-billion short-term economic recovery plan, to mitigate the impacts of an anticipated economic contraction of two per cent. The plan will push for more significant digital transformation and accelerating the growth of the digital economy. Through PENJANA, the Malaysian government has officially adopted Japan’s ‘Society 5.0’ as Malaysia’s vision for innovation in the post-COVID era. First coined by Japan’s Prime Minister Abe in 2017, Society 5.0 envisions a super-smart society in which technologies such as AI, robotics, and 5G are integrated into the economy and society to improve quality of life.

The future is digital . . .

Under PENJANA, the government has made a C$314-million commitment to digitization and ‘Society 5.0.’ The Malaysia Digital Economy Corporation (MDEC) – the government’s principal agency tasked with promoting and fostering the country’s science and technology industry and talent – will receive a total of C$223 million to assist small and medium enterprises in digitalizing operations and entering e-commerce, alongside another C$31.8 million earmarked to aid the adoption of smart manufacturing. Close to C$8 million is slated for upskilling programs offered by MDEC to help individuals receive training on computer programming and other digital technologies. The recovery program will also support the forthcoming Shop Malaysia Online campaign, which will encourage online retail through discounts and promotions on e-commerce platforms.

A political trip-wire . . .

Malaysia’s PENJANA comes at a time of political instability. Prime Minister Muhyiddin has faced unrelenting opposition, including threats of a no-confidence vote, from his predecessor and former mentor, Mahathir Mohamad. Muhyiddin is expected to call an unprecedented snap election by March 2021, leveraging a relatively successful COVID-19 response and popular stimulus packages. The election would cement the legitimacy of Muhyiddin, who came to power through the king’s appointment upon the dissolution of the Mahathir-led ruling coalition. The election, however, could affect the ongoing recovery and digitalization agenda under PENJANA.

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